Continual growth in monthly recurring revenue and cash flow should be a primary focus for every IT services business owner. Each forward movement helps boost the company’s financial position and more than offsets any anticipated losses due to client churn or seat reductions. Increasing the amount of MRR in new contracts and renewals help turn those aspirations into reality.
Close rates are critical. Moving prospects from lead to a signed contract in the least amount of time is not just a sign of sales success and efficiency, but it demonstrates your MSP’s financial strength. Boosting the speed and rate of closes increases profitability. Sales-related expenses are typically smaller, while MSPs can convert projected revenue for those accounts more quickly into bank deposits. That money, in turn, can pay for hiring new techs and expanding sales and marketing activities, fueling even greater growth for the business.
What better way to fund the rapid expansion of your MSP than with your own money? No interest fees, closing costs, or paperwork. Accelerating the lead-to-close-to-cash cycle gives you more financial freedom and rapidly increases the value of your business to prospective buyers or investors.
How can MSPs speed up their sales closing process to realize those benefits? Like any worthwhile business improvement project, you start with a plan.
Continually Revise Your Methods
Process efficiency is key in today’s competitive environment, and IT services companies need to be at the top of their game. Converting marketing efforts into leads for the sales team are just the initial steps. Every MSP should have a playbook or list of potential activities for transforming prospects into new clients, a well-honed system with proper oversight that the team periodically reviews and updates.
Think of your sales processes as an engine. Frequent adjustments help optimize performance and efficiency, and with a little tinkering and ingenuity, you can usually coax even more horsepower and speed from virtually any machine. Modifications to your sales playbook can have a similar effect.
Transforming leads to new clients is a “tunable” process, and MSPs must work continually to simplify, enhance, and speed up those activities to optimize sales closing rates. Not all of those changes may be easy, but persistent improvements can strengthen MRR, grow new revenue streams, and help fund expansion plans.
Here are a few best practices for “speeding up” the closing process for your managed services business:
- Identify the issues and opportunities.
Conduct a quick but thorough evaluation of each potential client’s IT environment, business objectives, and compliance requirements. Your sales team can quickly and effectively assemble preliminary plans and value-driven proposals to move the conversations (and relationships) forward with that information in hand.
- Focus on key decision-makers.
Every MSP needs a customer relationship management (CRM) tool today. From the initial lead to the final signature, your team should be collecting names, titles, and responsibilities, as well as personality traits and personal details. Collect information that will allow the sales team to build bonds with decision-makers, which, in turn, can help build trust and speed up the closing process.
- Know your competitors
Spend time learning about the other MSPs and IT services providers in your area. Study their portfolios and messaging and identify pricing and any possible advantages. That will be useful when conveying your firm’s differentiators and discussing potential solutions with prospects. This will allow your team to more readily focus on key benefits and improve the odds of landing their business.
- Quickly recognize and address concerns.
The “dance” is one of the most time-consuming parts of the sales process. Identifying real and perceived objections can be a slow and painful progression for both MSPs and prospective clients. A solid sales playbook can help with questions and ideas for eliciting feedback and gaining buy-in on specific technology or business concerns. Proactively develop thoughtful responses to possible objections. Employing trial closes and an automated proposal system can also help MSPs identify objections and gain contract approvals much faster.
- Control your message.
Beginning with the initial assessment, MSPs must carefully meld their talking points to match their clients’ needs with the available portfolio of services. You may need to pitch new offerings to address specific requirements since the ultimate goal is to best support that business, including its operations, employees, customers, and long-term objectives. If the sales team can align messaging to address their pain points and aspirations, closing the deal will typically take less time.
- Leverage sales tools.
Automation helps MSPs thrive. The sales process is no exception, with various management tools available to help you better manage the chaos from lead generation to the close. PSAs and RMMs help your team manage the day-to-day operations, and connections with accounting and quoting applications eliminate many manual tasks. Automation helps MSPs speed up their sales processes while maximizing MRR and cash flow opportunities from each lead.
Many small business owners hire experienced sales professionals and only offer a basic education on products and services before setting them loose. MSPs must continually nurture and train all their team members, especially those who play a critical role in driving revenue and cash flow. Investments in third-party training and coaching programs, in addition to a well-rounded understanding of the value of your products and services, can positively impact the speed of your sales process.
Track Your Team’s Performance
MSPs have a lot of sales tools at their disposal. From CRMs and lead generation applications to PSAs and other management systems, it’s easier than ever to automate the processes and monitor almost every step of your operations. Generating reports on those activities can be just as simple.
Setting and monitoring the speed and rate of sales closes allows you to assess and improve the process. You can experiment with training programs and new tools and adjust and streamline procedures to gauge the impact of each on the sales team. Performance may be measured using many variables; however, the most impactful numbers typically involve your bottom line. Faster closing rates mean nothing if MRR, per deal revenue, margins and cash flow don’t also move in a positive direction.
Orchestration and oversight are crucial to your success. Monitoring the impact of each change in sales tactics through financial reviews and employee discussions can simplify the decision-making process, giving you an easier way to differentiate the good options from the bad.
Getting more sales should always be better. Just be sure not to compromise pricing or contract duration to get a quicker signature on a new contract. The obvious goal of sales is to close deals, but it’s also about providing value. With a fine-tuned sales process in place driven by value, expedited close rates should follow.
Revenue is the fruit of faster close rates and increased sales. Real revenue is found in an MSP’s bank account, not in accounts receivable. Further set up your MSP for success by communicating clear payment expectations and collecting with ConnectBooster—an automated variable billing and collections tool that saves MSPs time and effort. Request a demo to see how ConnectBooster can help you achieve effortless cash flow from your newly closed deals.